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Great read. Obviously there's a lot more to pricing -- which is as much science as it is art -- than can be covered in an article. For those interested, I would
by jonnathanson 13y ago
Great read. Obviously there's a lot more to pricing -- which is as much science as it is art -- than can be covered in an article. For those interested, I would suggest an approachable, but comprehensive text on pricing theory and analytics. "The Strategy and Tactics of Pricing" by Nagle, Hogan and Zale is a great resource. (And speaking of pricing: buy it used, if possible; like most textbooks, it's fairly expensive).
One word of caution: tiered and freemium models are, once again, all the rage in software. And that's great. It's good to see people actually trying to make a profit, and many of them succeeding. But it's very easy to go overboard on tiering. Too much tiering and too much customization in your pricing model will create two big problems: 1) customer confusion and resentment, 2) hidden operational and opportunity costs in managing the tiers and customization. Segmented pricing is great if you can do it, but it needs to be simple, manageable, and transparent.
- destraynor 13y agoAbsolutely - if you find yourself having to tier lots & lots , it's a good argument for utility pricing instead. Re: Pricing, thanks will check it out.